Home > industry > advertising > We are not going to make any money in 2 years: Sanjiv Goenka

Kolkata: Anyone following the ongoing Indian Soccer League (ISL) closely would have noticed that Atlético de Kolkata (ATK), the defending champion, is playing far more aggressively than it did last year.

Though led by the same coach, Antonio Habas, ATK has created many opportunities and has scored 26 goals in 14 league matches—the second highest after league topper FC Goa—whereas last year the team was more vigilant about defending its own goal.

At the same time, it has conceded 17 goals, and at one point was struggling at the bottom of the league table. When its strikers started to combine and score after early hiccups, the team staged a comeback.

“It really doesn’t matter if you concede three goals if you can score one more," says Sanjiv Goenka, one of the co-owners of ATK and chairman of the RP-Sanjiv Goenka Group. It was decided among the owners that ATK will play attacking football this year because that gets more attention than dogged defence, says Goenka.

The coach was briefed to field a team accordingly, and Goenka is happy that ATK striker Iain Hume is the second highest scorer in the tournament so far with 10 goals. Clearly, Goenka and his partners—Kolkata-based entrepreneurs Harsh V. Neotia and Utsav Parekh, and former cricketer Sourav Ganguly—measure success by the amount of excitement their team can create on the ground.

Back in the day, Goenka says he wasn’t any good at sports, but was always a keen follower. Football and cricket were always close to his heart, and he is now riding them to expand his businesses.

When bidding for a franchise in the Indian Premier League (IPL) cricket tournament earlier this week, Goenka showed the same amount of aggression as his football team and snapped up the Pune side. No money is to be made from the venture, and it was a cold business decision to boost sales of his core companies, Goenka said in an interview. Edited excerpts:

Did the missed opportunities from the past influence your bid this time?

We have been interested in cricket for a long time, but when it came to bidding, the bid had to be a prudent one—a commercial decision—and not an emotional one.

Yes, we were keen on IPL initially, but at the same time we have passed up two opportunities previously.

Once there were two teams on the block, but to our mind they didn’t make commercial sense to bid for them. Then, ICICI Bank was once looking for a buyer for the Hyderabad franchise, but we chose not to look at it because my brother was said to be interested in it. Not that he asked me to stay away.

How did you derive the figure that you bid?

We did our calculations based on our group’s marketing budget, so in the end it wasn’t difficult to determine the figure; we just calculated backward what we could spend on this vehicle.

We consciously paid a premium to be the top bidder so that we had the first mover’s advantage in choosing players from the pool. Clearly, ours was a bid to win.

Still, it isn’t a huge sum that we have staked if you see it from the standpoint of our marketing budget and requirement for brand communication.

What are the commercial prospects for your IPL team?

To my mind, it is clear that we are not going to make any money in two years. Most of the IPL franchises are now making money, but we will not because we have only a limited two-year window available to us. You cannot make money from such a property so quickly.

At the same time, I am convinced that the return in the form of branding would far exceed the cost of running the franchise for two years.

So is it brand communication alone that you are looking at?

IPL gives us several opportunities. We could use it as a brand communication tool for our retail business under Spencer’s (a retail chain) or CESC (earlier known as the Calcutta Electric Supply Corporation) or both.

Clearly, our vision is to expand our power business nationally, and it is important to create a brand recall for CESC ahead of its national roll-out.

At the same time, we could also use IPL for creating visibility for our entire group. We have given ourselves a new identity; IPL could be an opportunity to communicate it nationally.

Are you happy with ATK?

Running the football franchise for two years gave me a great deal of confidence to expand in the business of sports. It has been a great experience so far, but we have some way to go before realizing the full potential of the property. Still, revenue from sponsorship for ATK this year is twice last year’s—I am impressed.

What makes you so excited about sports properties?

Sporting events are a great vehicle for connecting with people. For instance, the football league allowed CESC to connect with its consumers in a completely new way.

The other day, I was travelling to the stadium to watch a home match. ATK was not playing well at that time. My car was stranded in a queue near the stadium when some young supporters on motorbikes noticed me. They immediately started a conversation with me saying that they weren’t giving up on ATK yet, and that it still had time to stage a comeback.

To be able to connect with consumers in such a manner is invaluable.

Does that mean you’ll look to invest in more properties?

We will continue to look at more opportunities in sports. We had looked at kabaddi previously. It didn’t appeal to me or to anyone in my team. But in hindsight, I am convinced that it was a missed opportunity—we should have bid for it.

What lessons did you learn from football?

Football taught us a lot of things. For instance, we had expected to sell many more tickets, but it is only now that we realize that bus connectivity to the Salt Lake stadium is a huge problem. It is impossible to shore up ticket sales without improving bus services to the stadium.

Similarly, experience taught us that it is absolutely not good to have politicking in the dressing room. Though we won last year’s ISL, there was a lot of politics among the players. So this time, when building the team, we decided to leave out all those players who could potentially create tension within the dressing room.

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